Nearly anyone that has ever attended a college or university has incurred some type of loan debt. In today's uncertain economy, it imperative to maintain a high credit score and save money in the process. Student loan consolidation companies can help borrowers manage their financial credits in a positive manner that benefits both parties involved. There are several companies to consider if a borrower is in search of a lender to merge his loan accounts and each company have their own benefits and drawbacks.
Federal Student Loans
Federal loans for students cannot be consolidated with private student loans. It is for this reason that most borrowers consolidate their federal credits under the Higher Education Act; this allows for more flexible repayment schedules, lower interest rates, and streamlined finances. Unlike private loans that may switch from one lender to another, once these loans are consolidated they are still owned by the federal government until repayment has occurred.
Private Student Loan Consolidation Companies
Since the economy has been in a recession, the credit crisis has hit financial lenders pretty hard. Many lenders that were once quite active in the loan consolidation business have withdrew their services and opted for more secure commercial transactions. This leaves borrowers with limited options if they are looking for competitive rates and incentives from the remaining loan consolidation companies.
Once private companies, such as Chase and Next Student, were financial giants and dominated the private student loan consolidation industry; since the recent economic hardships, there are a handful of companies that still participate in private student loan consolidations. The top two include:
1. Student Loans Network - provides the basic opportunities to lower monthly installments, streamline loan finances, and improve the borrower's credit score by paying off the individual private loans. This company also provides an option to get free debt consultation if the borrower has additional debt outside of loans. Having multiple accounts with the same company can lead to added discounts and savings.
2. Wells Fargo - offers the borrower the choice of a fixed or variable rate along with the basic advantages of consolidation. This company allows borrowers to consolidate large amounts of loan debts and offers professional advice and services to ensure the borrower has the most efficient program suitable for his situation. Wells Fargo also offers other services (banking, investing, and insurances) outside of loans from which borrowers can benefit.
Compare the above companies and shop smart; be sure to study terms, conditions, and fees before committing to any one consolidation company.
What are Student Loan Consolidation Companies Looking For?
Private loan consolidation companies use a borrowers F.I.C.O. credit score to determine his eligibility for their programs. This score dictates whether the borrower qualifies for a program and at what initial interest rate he will get his consolidation. Don't forget that most consolidation programs do not have fixed rates for private loans as these are tied to a standard point of reference; if this benchmark rises, so does the rate on the loan. Be sure to find out exactly what determinants factor into your consolidation rate and how these elements affect fluctuations.
Although student loan consolidation companies are a rare breed, there are still a few that are willing to help borrowers manage their loan debts.
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